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PMPRB NEWSletter: February 2021, Volume 25, Issue 1

e-bulletin

Table of Contents

Notice to Readers

Reminders

  • The PMPRB no longer issues e-bulletins. To be notified of new announcements, publications, and other initiatives, please follow us on Twitter.

Update on recent PMPRB engagement activities

As described in greater detail below, since the release of the PMPRB’s new Guidelines on October 23, 2020, the PMPRB has hosted multiple technical briefings, webinars and outreach sessions with the media, government partners, the pharmaceutical industry and the broader stakeholder community. In addition, the PMPRB met bilaterally with representatives and members of Innovative Medicines Canada (IMC), BIOTECanada and the Canadian Life and Health Insurance Association (CLHIA) to discuss the new Guidelines.

The outreach webinars hosted to date allowed for ample question and answer sessions. The PMPRB will continue to engage in outreach activities in the lead-up to the coming into force of the new regime in July 2021, the details of which will be made available on the PMPRB website and other media platforms shortly.

Guideline Monitoring and Evaluation Plan (GMEP)

The PMRRB is developing and implementing a comprehensive Guideline Monitoring and Evaluation Plan (GMEP) to assess any changes in trends following the implementation of the new Guidelines and inform the need for any future adjustments. Previous evaluation plans have been developed and implemented for past changes to the Guidelines. However, given the unparalleled scale and scope of the changes represented in the new Guidelines, this plan will be the most comprehensive one of its kind to date.

As currently envisaged, the GMEP  proposes to assess five key areas of focus:

  1. prices of medicines;
  2. access to medicines;
  3. the pharmaceutical ecosystem;
  4. PMPRB processes; and
  5. the policy environment.

Relevant metrics will be identified for each area of focus, and benchmarks will be established based on the data observed in the years immediately preceding the coming into force of the amended Patented Medicines Regulations. With 2021 being a transition year, the GMEP will measure the effects of the new framework starting with 2022, at which point these metrics will be monitored on an ongoing basis and compared against the established benchmarks in order to identify and evaluate any positive or negative trends in the data.

In parallel to continued patentee outreach sessions on the Guidelines, the PMPRB is hosting multiple consultation sessions for its stakeholder community on the GMEP in the first half of 2021. The first such session was a workshop with the PMPRB’s government partners on January 19, 2021. Its purpose was to seek feedback on research questions and metrics of particular interest to federal, provincial, and territorial health ministries, as well as health technology assessment bodies and other pan-Canadian health organizations.

The PMPRB will release a GMEP Brief document in the coming months on the scope of its planned monitoring and evaluation efforts and solicit written feedback from stakeholders on the proposal. A series of outreach sessions are envisioned following the release of the GMEP Brief, with Technical and Public GMEP webinars planned for Spring 2021. 

The technical webinar will bring together key academics with expertise in the GMEP’s five key areas of focus and will seek their feedback on objectives, research questions, metrics and methodologies. The public webinar will provide an overview of GMEP and seek feedback from across the PMPRB’s diverse stakeholder community.

The PMPRB has identified a considerable number of preliminary research areas and related metrics and we look forward to further enhancing the GMEP based on the feedback we receive from our stakeholders. Further details on how interested parties can participate in the engagement sessions and provide their feedback will be made available on the PMPRB’s website and announced on Twitter account in due course.

Notice and Comment – proposed changes to the definition of Gap medicines and the timeline for compliance with the MLP for existing medicines

On January 12, 2021, the PMPRB invited stakeholders to comment on two proposed consequential amendments to the new Guidelines resulting from the Minister of Health’s decision to delay the coming into force date of the Regulations Amending the Patented Medicines Regulations (“Regulations”) a further six months, to July 1, 2021. The PMPRB proposes to change the definition of Gap medicines and the timeline for compliance with the Maximum List Price (MLP) ceiling for Grandfathered and Gap medicines. Additional information is available on the PMPRB Guidelines page. The deadline for submitting written comments to the PMPRB consultation inbox on the proposed changes was February 15, 2021. 

Points of clarification for the new Guidelines

COVID-19 Vaccines

As communicated on November 20, 2020, in the Public Webinar on the PMPRB Guidelines, medicines on Health Canada’s List of Drugs for Exceptional Importation and Sale pursuant to section 3 of the March 30, 2020, Interim Order Respecting Drugs, Medical Devices and Foods for a Special Dietary Purpose in Relation to COVID-19, or on the list(s) published by Health Canada pursuant to the September 16, 2020, Interim Order Respecting the Importation, Sale and Advertising of Drugs for Use in Relation to COVID-19, will not be subject to review or investigation by the PMPRB unless a complaint is received from the federal Minister of Health or her provincial or territorial counterparts. This will be case for as long as the Interim Orders are in effect.

Upon the expiry or repeal of the Interim Orders or the removal of a patented medicine from the applicable list, absent a pre-existing complaint, price reviews for these medicines will be based on public international and domestic commercial list prices, and not on introductory non-commercial pandemic prices in Canada and the PMPRB11. In instances where the PMPRB is determining the market size of such a patented medicine as part of a price review, it will not take into account sales made while the medicine was on the applicable list.

This policy has been adopted as part of a government-wide effort to provisionally ease the regulatory pathway for drugs and medical devices urgently needed for COVID-19 diagnosis, treatment, mitigation or prevention.

Staged implementation of new excessive pricing criteria

A number of the PMPRB’s stakeholders continue to press for a staged implementation of the new excessive pricing factors that have been added to section 85 of the Patent Act through the amended Regulations. They urge the PMPRB to consider applying the new PMPRB11 Schedule of comparator countries in the price review process immediately upon coming into force of the Regulations but not to apply the new economic factors until they have been further studied and their potential impact is better understood. Some stakeholders also contend that the new pricing factors cannot be operationalized in the current context in view of Federal and Quebec Courts decisions regarding the inclusion of indirect rebates (such as PLAs) in the net average transaction price (“ATP”) calculation reportable to the PMPRB under the amended Regulations.

The PMPRB does not agree that further study of the factors is necessary before they become operational. Similarly, the PMPRB does not agree that the new pricing factors cannot be operationalized as a result of the Federal and Quebec Superior Court decisions, which, on the contrary, upheld their validity and constitutionality. Nevertheless, in view of the ongoing litigation, the PMPRB has decided that it will only commence an investigation into the price of a new patented medicine if it appears not to comply with the Maximum List Price (MLP) as set by reference to the PMPRB11 countries, or if a complaint is received. In other words, until such time as there is clarity from the Courts of Appeal on the status of indirect rebates in the calculation of the net ATP, price tests that are based on the new excessive pricing factors alone will not give rise to an investigation for failure to comply with the Guidelines. This policy is reflected in section 87 of the new Guidelines. 

Clarification of paragraphs in the Guidelines

The table below underscores two minor editorial clarifications that are being made to paragraphs 41 and 61 of the Guidelines:

Paragraph in the Guidelines

October 23 Guidelines

Clarification

Paragraph 41: the use of the iTCC test for iMLP

If the patentee has not filed international price information for the PMPRB11 countries after two reporting periods (i.e. the introductory period in which the medicine is sold in Canada and one subsequent period), the iMLP is set by the top of the domestic Therapeutic Class Comparison (“dTCC”). The dTCC will be calculated based on the highest cost of treatment among the comparator medicines, derived by taking into account the lowest price of the comparator medicine(s) (see Appendix A for further details). If there are no domestic therapeutic class comparators, the MLP may be set by the median of the international Therapeutic Class Comparison (“iTCC”).

If the patentee has not filed international price information for the PMPRB11 countries after two reporting periods (i.e. the introductory period in which the medicine is sold in Canada and one subsequent period), the iMLP is set by the top of the domestic Therapeutic Class Comparison (“dTCC”). The dTCC will be calculated based on the highest cost of treatment among the comparator medicines, derived by taking into account the lowest price of the comparator medicine(s) (see Appendix A for further details). If there are no domestic therapeutic class comparators, the iMLP may be set by the median of the international Therapeutic Class Comparison (“iTCC”).

Paragraph 61: High Cost Category 1 medicines with sales at MLP greater than $12 million per year

For medicines that (1) are High Cost medicines or medicines with sales at MLP greater than $12 million per year; and (2) have an available cost-utility analysis, the MRP is calculated as follows:

For medicines that (1) are High Cost medicines with sales at MLP greater than $12 million per year; and (2) have an available cost-utility analysis, the MRP is calculated as follows:

Appendix D of the Guidelines

This section underscores a few editorial and substantive clarifications that are being made to Appendix D of the Guidelines, which is intended to help patentees in calculating the MRP[A].

As described in section V of the Guidelines, a market size adjustment is applied to Category I medicines when sales at MRP[A] exceed $50 million across all dosage forms and strengths of the medicine (e.g., all DINs combined). This adjustment will be applied annually in accordance with the following table:

Market size adjustment for High Cost Category I medicines

Annual sales‡ MRP Incremental MRP adjustment factor MLP adjustment factor

<$12M

MLP

0%

1

$12M-$50M

Greater of PEP and Cap

($12M - $12M * (MRP/MLP)) / Sales* + (MRP/MLP)

$50M-$100M

-25%

($21.5M - $9M * (MRP/MLP)) / Sales* + (1 - 25%) * (MRP/MLP)

>$100M

-35%

($32M - $7.8M * (MRP/MLP)) / Sales* + (1 - 35%) * (MRP/MLP)

‡ Annual sales are calculated at MRP[A].
* Sales are calculated at MLP.

Market size adjustment for High Market Size Category I medicines

Annual sales‡ MRP Incremental MRP adjustment factor MLP adjustment factor

<50M

MLP

0%

1

$50M-$100M

Lowest of the MLP and the median of the dTCC

-25%

($50M - $37.5M * (MRP/MLP)) / Sales* + (1 - 25%) * (MRP/MLP)

>$100M

-35%

($56.7M - $32.5M * (MRP/MLP)) / Sales* + (1 - 35%) * (MRP/MLP)

‡ Annual sales are calculated at MRP[A].
* Sales are calculated at MLP.

For example, a medicine requiring an incremental cost-utility ratio (ICUR) and realizing between $50 million and $100 million in sales based on units sold at the MRP will have its MRP[A] set as follows:

MRP[A] = MLP * (($21.5M - $9M * (MRP/MLP)) / Sales* + (1 - 25%) * (MRP/MLP))

MRP[A] = MLP * MLP adjustment factor.
The MLP adjustment factor is calculated for each annual sales range, as per the corresponding formulas. Each MLP adjustment factor is then multiplied by the sales at MLP. The MLP adjustment factor that applies is the one that when multiplied with sales calculated at MLP, it results in an amount that falls within the corresponding annual sales range. The MRP[A] is determined by multiplying the MLP by that adjustment factor.

CPI Adjustment Factors

Following the coming into force of the amended Regulations, the process for determining the lagged change in the consumer price index will remain the same as the Consumer Price Index (CPI)-Adjustment Methodology in the Compendium of Policies, Guidelines and Procedures. Information on the rates per year can be found on the PMPRB Website.

Foreign Price Verification: PMPRB11

With the coming into force of the amended Regulations, the PMPRB will be updating the comparator countries from the PMPRB7 to the PMPRB11. Information on potential sources for the PMPRB11 countries can be found on the PMPRB Website.

Exchange Rates

Information on exchange rates applicable for new and existing medicines are available on the PMPRB Website.

GDP per capita

Starting July 1, 2021, the amended Patented Medicines Regulations require patentees to report prescribed information relating to cost-utility analyses prepared by publicly funded Canadian health technology assessment (HTA) agencies, for which the outcomes are expressed as the cost per quality-adjusted life year (QALY) for each indication that is the subject of the analysis. The requirement applies if any cost for the medicine as identified in the analysis is or would be, when pro-rated to account for that medicine’s use over a 12-month period, greater than or equal to 50 percent of the gross domestic product per capita in Canada at the time of publication of the analysis.
The GDP per capita is also referenced in the Guidelines (paragraph 57), which indicate that a new medicine will be classified as Category I High Cost if its 12-month treatment cost is greater than 150% of GDP per capita.

The information required to determine the applicable gross domestic product per capita in any given year may be retrieved from Statistics Canada , which publishes both the gross domestic product (GDP) and the population estimates. Based on this information, the most up-to-date annual GDP per capitaFootnote 1 is for 2019 and it is $61,466. The PMPRB will update the GDP per capita estimates on its website annually.

Market Size

The market size threshold set out in the Guidelines will be monitored as part of the GMEP and may be adjusted from time to time to reflect changes in the GDP.

NPDUIS Activities

The PMPRB continues to engage with and support Canadians through the NPDUIS initiative. In addition to publishing a number of analytical studies, the PMPRB has hosted information sessions to share the results of its recent reporting.

NPDUIS Advisory Committee Meeting

Webinars were held quarterly with the NPDUIS Advisory Committee members in 2020 and the Committee reconvened virtually in October for an annual meeting led by PMPRB and Canadian Institute for Health Information (CIHI) representatives. The NPDUIS Advisory Committee advises and supports the PMPRB in establishing research priorities, in the development of research methodologies, and in the interpretation of analytical results. It is composed of public drug plan representatives, including Quebec and participants from Health Canada, CIHI, the Canadian Agency for Drugs and Technologies in Health (CADTH), and the pan-Canadian Pharmaceutical Alliance (pCPA) Office.

NPDUIS New and Upcoming Publications

New Releases

Reports

Market Intelligence Report: Combination Asthma Inhalers, 2018

In April 2020, the PMPRB released a new installment in the Market Intelligence Report series, which provides detailed information on specific therapeutic market segments of importance to Canadians. The 2018 edition focuses on the market for inhaled corticosteroid (ICS) and long-acting beta agonist (LABA) combination inhalers used in the treatment of asthma. These medicines generate annual sales of over half a billion dollars in Canada and represent close to half of the total sales for obstructive airway disease medicines. Canadian list prices for combination inhalers for asthma far exceed the levels prevailing in many other countries, and in fact, this sub-class tops the list of therapeutic areas with the greatest cost implications due to higher prices in Canada.

The analysis provides insight into the use of these medicines, as well as their market shares, pricing, and annual treatment costs. It explores Canadian markets from the national as well as public and private payer perspectives, positioning them within an international context. The findings are centered on the 2018 calendar year, with a retrospective look at trends in recent years.

CompassRx, 6th Edition: Annual Public Drug Plan Expenditure Report, 2018/19

In December 2020, the PMPRB released the sixth edition of its flagship CompassRx report, which monitors and analyzes the cost pressures driving changes in prescription drug expenditures in Canadian public drug plans. This edition provides insight into the factors driving growth in drug and dispensing costs in 2018/19, as well as a retrospective review of recent trends in public drug plan costs and utilization.

Prescription drug expenditures for the NPDUIS public drug plans increased by 5.6% in 2018/19 to reach $12.1 billion, driven primarily by a marked rise in the use of higher-cost drugs and the introduction of Ontario’s OHIP+ program.

Meds Pipeline Monitor, 2020

Meds Pipeline Monitor (MPM) is a horizon scanning report that features a selection of new medicines in the late stages of clinical evaluation that may have a significant impact on future clinical practice and drug spending in Canada. The 2020 edition identifies a broad range of late-stage medicines in the pipeline in 2020 and reviews those featured in the 2019 MPM to report on changes to their status in the pipeline. A section focused on Canada highlights potentially significant medicines currently under review by Health Canada.

This edition of the report also includes a new section on COVID-19 that provides an overview of medicines undergoing Phase I, II, and III clinical trials or in pre-registration for the treatment and prevention of the novel coronavirus disease.

Meds Entry Watch, 5th Edition

This Meds Entry Watch report series explores the market entry of new medicines in Canada and within an international context. Building on retrospective analysis of trends since 2015, this edition focuses on medicines that received first-time market approval through the US Food and Drug Administration (FDA), the European Medicines Agency (EMA), and/or Health Canada in 2018 and 2019, and analyzes their uptake, pricing, sales, and availability as of the last quarter of 2019. In addition to the international analysis, a Canadian-focused section provides information on medicines that received their first Health Canada approval in 2018, as well as a retrospective review of quarterly approvals over the past five years.

Chartbooks

Biologics in Canada

This two-part chartbook series, published in May 2020, examines Canadian and international trends in the sales, cost, use, and pricing of biologics as of the end of 2018, highlighting the significant potential savings that could be achieved if biosimilar uptake and pricing levels in Canada were brought closer in line with international levels.

In Canada, sales of biologic medicines tripled over the last decade, reaching $7.7 billion in 2018 and accounting for almost one third of all pharmaceutical sales. This placed Canada among the top-ranked countries in the OECD in terms of per capita spending; however, biosimilars made up only 1.9% of Canadian biologic spending.

Part 1: Market Trends, 2018 examines the market dynamics of biologics in Canada and compares Canadian and international trends in sales, pricing, and biosimilar uptake. Part 2: Biosimilar Savings, 2018 draws on these recent trends to estimate the current and future cost savings that could be realized by bringing the uptake and/or prices of biosimilars in Canada in line with median OECD levels.

Oncology Medicines in Canada: Trends and International Comparisons, 2010–2019

Oncology medicines are an increasingly important driver of Canadian pharmaceutical sales. Over the past decade, this significant segment has doubled its share of the market, now accounting for $3.9 billion in sales nationally. With an aging population expected to increase demand for cancer therapies, and a strong pipeline of oncology medicines under development, this fast-growing market is expected to continue to be an important consideration for Canadian patients, prescribers, and payers in years to come.

The chartbook, published in October 2020, provides an overview of the Canadian prescription oncology market from 2010 to 2019. The analysis is divided into three sections: the first explores the dynamics of the international market for oncology medicines; the second takes a closer look at oncology sales, market distribution, and treatment costs in Canada; and the third examines these trends in the context of Canada’s private drug plans.

Resources

In June 2020, the PMPRB, through the NPDUIS initiative, released updated Guidelines for Conducting Pharmaceutical Budget Impact Analyses for Submission to Public Drug Plans in Canada, which were first published in 2007. These Guidelines provide a standardized approach and detailed recommendations for developing a BIA for submission to the Canadian Agency for Drugs and Technologies in Health (CADTH) or to one of the participating federal/provincial/territorial drug plans. The final recommendations are the result of a multi-year process that included extensive research and consultation with relevant stakeholders, including CADTH and participating plans.

Coming Soon

Reports

Alignment Among Public Formularies in Canada

This three-part series compares the coverage for medicines across provincial and federal public drug plans. The information contained in these reports will inform the dialogue on improving the affordability and accessibility of necessary prescription medicines, including exploring the need for a national formulary.

The first report, published in 2017, provided insight into the degree of alignment among the formularies by comparing the overall listings, as well as specific market segments including single- and multi-source medicines, high-cost medicines, and a specified list of essential medicines. The second and third parts will focus on oncology medicines assessed through the pan-Canadian Oncology Drug Review (pCODR) and newer medicines reviewed through the Common Drug Review (CDR) process, respectively.

Market Intelligence Report: New Oral Anti-Diabetic Drugs, 2019

This series of reports provides short, targeted analyses of therapeutic market segments of importance to Canadians. It highlights the uptake in utilization, market shares, pricing and treatment costs of the related drug class, and identifies opportunities for potential cost savings. These studies are designed to inform policy discussions, aid in evidence-based decision making, and provide Canadians with a more comprehensive view of issues pertaining to pharmaceutical drug pricing and utilization.

Previous reports in this series have explored the market impact of biologic response modifier agents for the treatment of chronic inflammatory diseases, anti-VEGFs used to treat age-related macular degeneration and other retinal conditions, and combination inhalers for asthma. The coming report will focus on oral anti-diabetic agents (DPP-4s and SGLT-2s) used in the treatment of type 2 diabetes, which accounts for 90% of cases globally.

Chartbooks

Expensive Drugs for Rare Diseases: Canadian and International Markets

The first releases in this series of short, graphics-based analyses focused on prescription oral solid opioids, biologic medicines, and oncology medicines in Canadian and international markets. The next analysis with examine the market for expensive drugs for rare diseases (EDRDs).

Staying Informed

The PMPRB hosts webinars to explain the key findings in its NPDUIS reports. If you are interested in receiving notifications related to the release of upcoming NPDUIS reports and invitations to the corresponding webinars, please send a request to: pmprb.npduis-sniump.cepmb@pmprb-cepmb.gc.ca.

For more information on future research topics and publications, see the NPDUIS Research Agenda on the PMPRB website and follow the PMPRB on Twitter.

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